Wanted: more meat, less pork

Wanted: more meat, less pork

Regular readers of this space know that I frequently inveigh against the Department of Transportation, the Office of Management and Budget and the White House staff for failing to promulgate a comprehensive national transportation policy.

Why is a policy necessary? How would it affect intermodal transportation? I don't equate a transportation policy with so-called national economic planning. The capitalist in me rejects the idea that government can or should try to plan the working of the economy. The Soviet Union demonstrated that detailed central planning of an economy is doomed to fail.

Intermodal has grown largely because government was not involved in its development. Various participants - steamship lines, port terminal operators, port authorities, railroads, drayage contractors, intermodal marketing companies, operators of distribution centers and a few I probably haven't thought of - work in their perceived self-interest to provide a seamless service that customers are willing to buy.

The U.S. has a hybrid transportation system, a mix of public and private parties and funding. Trucking companies are privately owned, but they use publicly provided rights-of-way for which they pay in part through user charges. Terminal operators in most cases are private companies, but they use public facilities and pay rent for that use. Rail service is provided by privately owned railroads that operate over privately owned rights-of-way.

This hybrid nature is why there is a need for a comprehensive transportation policy. That does not mean that DOT planners should even think of allocating traffic among the modes. But it should be in a position to channel public funds in a way that encourages each of the participants to achieve its maximum potential. The DOT is not in such a position now, and there is no indication that it will be any time soon.

Secretary of Transportation Mary Peters recently told the U.S. Chamber of Commerce that her department's goals for this year are to alleviate congestion on highways and in the air.

Numerous studies forecast that demand for freight transportation will double by 2020. Transportation capacity has not kept pace with growth in demand for years, and existing funding mechanisms will not pay for the thousands of lane-miles of new highways needed to meet expected demand. The Bush administration has made it clear that it will not tolerate any increases in taxes to pay for additional highway capacity.

That raises the possibility that some demand for freight transportation service in 2020 will not be met.

If there were a transportation policy, federal funds might be allocated differently. They might be allocated in a way that nudged carriers and their customers to behave differently.

Railroads, for example, this year will spend $10 billion on capital projects such as replacing existing equipment and facilities nearing the end of their useful lives, and on providing increased capacity.

BNSF Railway is rushing to complete double-tracking of its Transcon route between Chicago and Los Angeles, which will result in a tremendous increase in capacity. Union Pacific has accelerated double-tracking of its Sunset route between Los Angeles and El Paso, Texas. Neither is receiving any federal financial assistance. In the East, Norfolk Southern is getting federal and state funding that, combined with its own money in a public-private partnership, will clear the Heartland Corridor between Hampton Roads, Va., and the Mid-west to handle double-stack trains.

Peters barely mentioned railroads in spelling out the DOT's priorities for the year. Yet the railroads are the one mode that can build capacity without having to seek government funding or approval.

Railroads seek a 25 percent investment tax credit to stimulate projects that would expand capacity. I emphasize this because there are some shortsighted shipper groups and labor union leaders who refer to the railroads as seeking federal financial assistance. Nothing could be further from the truth. An investment tax credit will result in capital projects being completed that will help get intermodal shipments through bottlenecks.

Intermodal will benefit from public-private partnerships intended to speed traffic through congested areas. A national transportation policy might stimulate Congress to channel funds where they would do the most good rather than to rainforests, museums and bridges to nowhere.